Philip Morris International Inc. (PM) receives a strong valuation score of 61 from InvestorsObserver's analysis. Our proprietary scoring system considers the overall health of the company by looking at the stock's price, earnings, and growth rate to determine if it represents a good value. PM holds a better value than 61% of stocks at its current price. Investors who are focused on long-term growth through buy-and-hold investing will find the Valuation Rank especially relevant when allocating their assets.
Metrics Analysis
PM has a trailing twelve month Price to Earnings (PE) ratio of 17 which places it around the histroical average of roughly 15. PM is currently trading at a average value due to investors paying around what the stock is worth in relation to its earnings. PM's trailing-12-month earnings per share (EPS) of 4.68 does justify its share price in the market. Trailing PE ratios don't factor in the company's projected growth rate, resulting in select firms having high PE ratios due to high growth potential enticing investors even when the underlying company has produced low earnings to date.
PM's 12-month-forward PE to Growth (PEG) ratio of 2.27 is considered a poor value as the market is overvaluing PM in relation to the company's projected earnings growth due. PM's PEG comes from its forward price to earnings ratio being divided by its growth rate. A PEG ratio of 1 represents a perfect correlation between earnings growth and share price. Due to their incorporation of more fundamentals of a company's overall health and focusing on the future rather than the past, PEG ratios are one of the most used valuation metrics by analysts today.
Summary
PM' has a weak valuation at its current share price on account of a overvalued PEG ratio due to strong growth. PM's PE and PEG are worse than the market average leading to a below average valuation score.
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